What may be the benefits to moving your old retirement plan to an IRA?

We live in a world of constant decision making. Some of our day-to-day decisions are easy to make, others are mandatory or have deadlines, then there are those few decisions that we may find ourselves at a juncture of procrastination and uncertainty.

One decision many find themselves putting off, is what to do with one’s retirement plan when they sever from an employer. Let’s face it – thinking about your retirement plan may not seem urgent, especially if you are young. It is not hurting you by leaving funds in your previous employer’s plan, but this to-do list item can become critical if you decide to put it off.

You will have a series of options of what to do with the hard-earned money you worked to build that is yours to keep.

·????????Cash out the account value;

·????????Leave the money in the former employer’s plan if permitted;

·????????Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted;

·????????Roll over to an IRA;

What may be the benefits to moving your old retirement plan to an IRA?

Control -?By rolling these funds into an IRA, you maintain control. Moving these funds means the fees inside your account likely become much more transparent. There can be a multitude of fees inside an employer’s retirement plan depending on the company and provider. If you roll your former retirement plan to an IRA, you should expect to know what will come out of that account each year when it comes to fees. It becomes your Individual Retirement Account.

More investment options –?Typically, in the previous employer plan, you are limited to the few investment options your employer has elected. You are also likely limited to the one provider they chose for you when signing up. When you move your funds, you are now opening yourself up to the universe of investments and companies available.

Communication and planning specific to you –?When you initially signed up for the plan, you may remember doing a fun little quiz where you input your basic information. From there, the computer spits out a year that you are estimated to retire with X amount of dollars. YAY, that’s all you need to know. Well, you are entitled to many more specific details beyond what that simple questionnaire says.

When you leave that employer, you most likely will not receive communication from that plan provider anymore. Instead, you may decide to work with a professional, who will not only help you with the rollover process, but actively assist you in planning for your retirement. They can get those dollars working for you in a way that aligns with your personal investment objectives. This process is specific to your goals & lifestyle beyond a computer-based algorithm or annual phone call from a 1-800 number.

Future conversion opportunities –?Fast forward. You have attacked this to-do list item, moved your pre-tax money from your old 401k/403b into a Traditional IRA.?Now, the opportunity for converting that money to a Roth IRA has just become much more simplified. If it makes sense, your decision to convert your Traditional IRA funds to Roth can be done much faster, and with less steps. There are many strategies for when and how to do this, all ending with something most people want, tax-free dollars when you take the money out in retirement.

As with most decisions we make, the upfront work can seem daunting at times and easy to put off. We cannot predict exactly what will unfold in our economy, the markets, politics, or in life overall. What we can control is where our money is held, asking the proper questions, what team of advisors we have supporting us, and where we get relevant information to help us make the best decisions for our financial future!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.